Mumbai, Mar 31: The macroeconomic situation in the country remains “comfortable although decline in agricultural production, concerns relating to the fiscal position and international political unrest remain downside risks that could constrain growth,” a Reserve Bank of India report said. Seen in the context of these uncertainties, performance of the Indian economy during 2002-03 demonstrated its “intrinsic resilience to shocks,” according to the report titled ‘Currency and finance 2001-02’; released here today. Despite the drought situation in many parts due to a weak and uneven monsoon after 13 years, foodgrain stock remains comfortable while the industrial sector is continuously showing signs of broad-based recovery led by all three major constituents - mining, manufacturing and electricity, it said.

The report pointed out that the international outlook, however, continues to be uncertain especially in view of the delay in economic recovery in face of persistent weak activity in advanced countries and ramifications of military action in Iraq, which is unfolding.
In the external sector, a robust performance of exports and invisible earnings, despite an adverse global scenario, was reflected in a modest surplus in current account, which facilitated a record accretion to foreign exchange reserves.
Conditions in financial markets were stable with ample liquidity creating favourable interest rate environment.
Real Gross Domestic Product (GDP) growth is estimated to be 4.4 per cent in fy-03 as per central statistical organisation compared to 5.6 per cent in FY-02 mainly because of sharp fall in agricultural GDP.
Bureau Report